AT&T said it has agreed to purchase FiberTower and its millimeter wave spectrum rights for an undisclosed amount. FiberTower owns licenses in the 24 GHz and 39 GHz bands and provides wireless services to carriers, enterprises and government entities. Carriers typically use FiberTower’s services for wireless backhaul.
The FiberTower acquisition is set to help AT&T realize its vision for “5G” and centralized radio access networks, the carrier said. In urban areas, AT&T plans to deploy remote radio heads linked to central baseband processing units. These links can be accomplished with fiber when it is available, but installing new fiber for every C-RAN deployment would be expensive and often impractical because of zoning and permitting issues.
FiberTower says its 24 GHz and 39 GHz spectrum can provide more than 200 high capacity links per square kilometer, and the company has been actively marketing this solution to carriers. The company holds licenses in most states and in several major metropolitan areas, including Washington, D.C., Boston, Baltimore and Detroit.
“According to AllNet Insights, FiberTower owns 8.4 billion [megahertz per potential customer covered] (8.1 billion 39 GHz and 374 million 24 GHz),” Wells Fargo analyst Jennifer Fritzsche wrote in a research note. “We would expect these details to come out in future [Federal Communications Commission] filings.”
FiberTower almost lost its spectrum licenses several years ago when the FCC cancelled its licenses because it had failed to build infrastructure to deploy the spectrum. At the eleventh hour, the company demonstrated it had built out some of its spectrum and avoided the loss of its licenses.
Millimeter wave spectrum is expected to play an important role in 5G once the standard is defined. AT&T and Ericsson have already demonstrated a millimeter wave system capable of delivering 1 gigabit of wireless data per second.
Verizon Communications has also acquired access to 28 GHz and 39 GHz spectrum licenses through its purchase of XO Communications. The carrier secured the right to lease XO’s licenses with an option to buy them next year.
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